So, who won the Broker Wars on Day 1? Depends on who you ask.
Earlier this month, United Wholesale Mortgage issued an ultimatum to mortgage brokers across the country: Either sign an agreement that forbids them from doing business with Rocket Mortgage and Fairway Independent Lending or lose the ability to do business with UWM, the largest broker mortgage channel in the country.
If a broker signs the agreement with UWM and then originate a loan with Rocket or Fairway, they would be subject to a $50,000 fine.
The deadline to sign the agreement was Monday.
What Happened Monday?
The Detroit News reported Tuesday that roughly 65 percent of 4,600 independent mortgage brokers took UWM’s side in the dispute, signing an agreement not to do business with Rocket Mortgage or Fairway Independent.
The News reports that of the 4,600 who did business with both UWM and Rocket, 3,000 accepted the ultimatum, 400 declined and about 1,200 did not respond.
What This Means
UWM says it has 10,400 broker partners today – down from 12,000 just last week. This is significant because 100 percent of UWM’s business comes from the broker channel.
A UWM spokesperson said the company expects 50 percent of the undecideds to break UWM’s way.
UWM CEO Mat Ishbia said, “I’ve received hundreds of calls and emails from mortgage brokers across the country and have been blown away at the positive response we’ve received, along with the sheer number of shops who have locked arms with us because they felt it was the right thing to do. We’re going to be able to look back at this as a pivotal moment that helped catapult independent mortgage brokers’ growth.”
Rocket Mortgage previously has said that its brokerage business is up 40 percent since UWM launched the Broker Wars.
Austin Niemiec, Rocket Pro TPO vice president, said that 22 of Rocket’s 25 largest broker partners rejected the UWM ultimatum and called the numbers put out by UWM “false and misleading.”
“The real facts are that we are aware of many brokers who didn’t even receive an addendum, let alone the ‘broker shops’ – meaning the actual brokerage firms – that they claim in the headline of their press release,” he said. “To believe that 10,000 broker-owners bent the knee to UWM is laughable.”
Niemiec added, “We completely understand the power of a mortgage broker is choice and independence, and we’d never ask them to sign a loyalty pact. The results speak for themselves. The broker community has provided us a resounding vote of support – with daily registrations up 40 percent since Mat Ishbia’s ultimatum. We also continue to lead the industry in pricing.”